Shale gas exploration - SA's R1 trillion prospect

Government has lifted a moratorium on shale gas exploration.

File picture: Mineral Resources Minister Susan Shabangu speaks to President Jacob Zuma during a 2010 conference. Picture: SAPA.

CAPE TOWN - A report on the exploration of shale gas in the Karoo has indicated it may generate almost R1 trillion for the South African economy.

Mineral Resources Minister Susan Shabangu on Tuesday explained why government decided to lift a moratorium on shale gas exploration in the region.

However, it may lead to companies using the controversial method of hydraulic fracturing or 'fracking', which is opposed by many environmentalists.

The report said a ban on shale gas exploration may be detrimental to the economy.

It states there could be trillions of cubic feet of shale gas, yet the document also added it is impossible to accurately gauge the quantities.

Shabangu warned mining activities, which do not include fracking, at this stage must adhere to strict conditions.

"Precisely because this is new territory we're entering, where we have to establish confidence, but also make sure that when it happens, it happens in a way that meets all the requirements."

Treasure the Karoo Action Group, a non-governmental organisation, has indicated it will take legal action to oppose any exploration applications.

The anti-fracking lobby group reiterated government has under-estimated the potential negative impact shale gas mining may have on the Karoo.

The action group's Jonathan Deal said: "At first round it is a written appeal to the minister in terms of the Mineral and Petroleum Resources Development Act so we anticipate that a number of organisations and even people from the public will be making that appeal."

Deputy Mineral Resources Minister Godfrey Oliphant said mining activity in the region would have economic benefits.

"We are changing the landscape of the country when it comes to energy generation and when it comes to gas resources. So if it's really true that we've got these resources, we must be excited about it."